If sequestration goes into effect, Penn could lose $34-42 million

Sequester looms over U. funding

If sequestration goes into effect, Penn could lose $34-42 million

As Washington’s negotiations to avoid a set of automatic spending cuts known as “sequestration” come down to the wire, researchers and administrators at Penn are on the edge of their seats.

Should the $85 billion in cuts to the federal budget go into effect Friday, the University could be facing significant cuts to its federal funding for research. Senior Vice Provost for Research Steven Fluharty estimates that the University could lose $34-42 million, with its funding from the National Institutes of Health taking the biggest hit.

“Sequestration is a blunt instrument that cuts everything without an evidence based approach to what really generates economic growth and prosperity,” Fluharty said in an email.

While 57 percent of Penn’s federal research funding in fiscal year 2012 came from the Department of Health and Human Services — the federal agency that oversees NIH — all but 18 percent of the University’s research funding comes from federal agencies, which are all subject to the cuts.

The School of Engineering and Applied Science receives funding from NIH, as well as the National Science Foundation and the Department of Defense, said George Pappas, former Engineering School deputy dean for research and current electrical and systems engineering professor.

RESEARCH AT RISK: This is part two of a three-part series examining the effects of sequestration on the University and its students.

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There is some uncertainty as to exactly how much flexibility individual federal agencies will have in deciding to implement their cuts. Last week, the head of NIH said that each of the 27 divisions of the agency will have discretion as to how they will implement a 5.1 percent cut. Associate Vice President of Federal Affairs Bill Andresen, however, said that talks about giving agencies more discretion have broken down.

As a result, the University’s lobbying effort has focused on meeting with lawmakers and organizations that also advocate for research funding to make the case that a deal to avoid the sequester should minimize cuts to scientific research.

Fluharty emphasized the importance of viewing research as an investment in new jobs and technology that “will ultimately result in better diagnosis and treatment of diseases, more efficient energy creation and utilization.” Director of the Office of Government and Community Affairs Dawn Maglicco Deitch added that cutting funding to research grants already in place will disrupt investments that have already been made.

“There are no shortcuts,” Deitch said about scientific research. “It requires a lot of investment over time, a lot of resources. Restricting the funding pipeline for research is really disruptive.”

OGCA employees, including Andresen, have been directly lobbying the federal government for months. Deitch emphasized that their coordination with other universities as well as organizations like United for Medical Research and the Task Force on American Innovation have been crucial to the lobbying effort.

“These are big conversations with broad coalitions with lots of voices,” she said.

The University has also been in contact with its representatives in the federal government — Sens. Pat Toomey and Bob Casey, as well as Rep. Chaka Fattah, who represents West Philadelphia. Deitch identified Fattah and Casey — who visited campus earlier this month to meet with researchers — as especially supportive of research funding.

Fattah said he doesn’t believe that research has to take a hit as part of a deal to avoid the sequester, citing the European Union’s decision to raise funding for science in the middle of significant austerity measures. Others, however, aren’t quite as convinced that lawmakers will be persuaded to spare a sector entirely.

“If we’re going to cut discretionary spending by 8.5 percent, I don’t know if you can zero out [cuts to] anything,” Business Economics and Public Policy Chair Mark Duggan said.

The White House also estimates that should the sequester take full effect, over 3,000 low-income students in Pennsylvania would lose federal student aid, and nearly 2,300 fewer students in the state would receive work-study jobs.

Additionally, the state would lose $26.4 million in primary and secondary education funding, and over half a million dollars in grants to law enforcement and public safety.

While the deadline for a deal is late Friday night, lawmakers in Washington have remained relatively quiet, with little progress reported from Capitol Hill in recent weeks. In late December 2012, congressional Republicans and Democrats struck an eleventh-hour deal to avoid full sequestration, set originally to occur on Jan. 1. The deal, which included tax increases and limited spending reductions, delayed automatic cuts until March.

This time, the consensus among most is that the cuts will take effect at the end of the week, given the lack of progress made in negotiating a deal. Last week, Deitch called sequestration “a fait accompli.”

“In general, Republicans believe we need more spending cuts and Democrats argue for increased revenues to solve the problem,” Andresen said. “Unfortunately, no one at this point believes there is much chance of finding a compromise.”

Ironically, Fattah added, the point of the Budget Control Act of 2011 — which created automatic spending cuts should the government fail to pass a debt deal — was to make the threat of sequestration daunting enough to force lawmakers to find ways to cut the deficit themselves. However, he still believes he and his fellow representatives in Congress will be able to strike a deal, even if it requires going into sequestration for a limited about of time.

“It contains specific cuts that were designed to be disastrous,” Fattah said. “It was never designed to be implemented.”